Trade War

Newsletter 312 - Aug. 9, 2026

Welcome to the 312th edition of Trade War.

Even as the U.S. and China prepare for the Trump-Xi summit next month in Washington, both sides engage in tit-for-tat trade actions. Beijing lashes out against new American restrictions on Chinese robots and power inverters and announces it will limit U.S. access to China-made drones.

Washington considers a ban on Chinese data center components. The People’s Daily accuses U.S. of “unilateral bullying.” Still, the two sides may still lower tensions at the heads-of-state meeting September 24.

Taiwanese president rushed to secure location at night, as part of ongoing war drills. Taiwan to slow internet speed next week in a test of civil preparedness. And Pentagon policy chief and China hawk Elbridge Colby is struggling to get invited to Beijing.

Notable/In depth ~

• Tariffs have changed routes traveled by Chinese content, not reduced US dependence on China, says Peterson Institute

• “China is choosing geopolitical heft over household welfare,” argues Chatham House

• “Are you a bard for a civilization at dusk?” Chinese writer asks Odyssey director Christopher Nolan

Tit for tat trade measures

Even as the U.S. and China prepare for the Trump-Xi summit next month in Washington DC, both sides are engaged in tit-for-tat trade actions.

US restricts China-produced robots

The U.S. Federal Communications Commission (FCC), announced new restrictions late last month on foreign-produced advanced robotic devices and the power inverters used in solar-powered energy, both areas where China is the globally dominant manufacturer. The FCC cited “supply chain vulnerabilities” and called their use an “unacceptable risk,” in the July 28 announcement (pdf).

Then on July 31, Washington announced that 43 more Chinese companies had been put on the Uyghur Forced Labor Prevention Act Entity List for alleged human rights abuses, banning them from selling to the U.S.

Last December, the FCC announced a ban on all foreign-made drones, then withdrew the ban for Chinese drones less than a month later in January. Some 70 percent of commercial drones in the U.S. come from Shenzhen-based producer DJI.

Washington mulls ban on Chinese data center components

The Trump administration is also considering blocking the import of Chinese data center components, in particular the optical transceivers used to send high speed data between centers, where, yet again, China dominates global production.

With all these measures, the U.S. is not just taking steps to limit supply chain vulnerabilities, it’s also hitting China where it has experienced the most growth—exports of advanced technology.